The rumors about a refresh for Apple’s TV product are swirling again, only this time with more ferocity. It’s almost like the time before the iPad arrived on the scene.

Apple‘s “Apple TV” is due a refresh–you know it, I know it, and Steve Jobs knows that the time is ripe to move his experimental project from a slightly popular curio into the million-selling mainstream. The rumor mill is grinding up to top speed, for starters. And then with set-top boxes becoming more and more popular, it’s a perfect moment for Apple to swoop in and redefine the nascent genre (as it’s done so many times before).

The recent batch of rumors have flown from Engadget‘s own rumor mill. Several months ago, the gadget site broke the news that a radical refresh of the Apple TV was on its way, with data coming from a well-connected inside source. While the existing Apple TV product is something akin to a crippled, single-purpose Mac Mini, with limited storage and a “fixed” OS X implementation, the new version was said to borrow more internals and design thinking from the iPhone. Now Engadget is re-confirming its rumor, but with a few extra snippets.

Firstly, and potentially depressingly for some, the new unit apparently won’t be capable of delivering a 1080-level full-HD output. Engadget’s sources say this is due to concerns that the circuitry won’t be comfortably capable of this level of video wizardry. It’s surprising, given that we know the old iPhone 3GS could actually squeeze out video of this resolution, and the iPhone 4’s chips are far more capable. We’re not sure about this–a limited resolution Apple TV would not look good in a market where 1080p HDTV’s are pretty much the only thing you can buy, and Apple’s own CPU is a powerful beast. It’s plausible the resolution will be software limited to 720p at first (requiring your HDTV to upscale the images, if your unit is a 1080p one), so that the quality of delivery is acceptable, but then a later refinement to the efficiency of the iOS version the new product is rumored to be supporting could easily add in 1080p output.

This notion also doesn’t agree well with other rumors that the new Apple TV will carry AMD’s powerful new Fusion APU chip inside–a hybrid device that’s both GPU and CPU. This chip is easily powerful enough to let FaceTime video chats, high-resolution games, and 1080p output be a feature of the new unit. We’re guessing we’ll have to wait and see, on this matter.

Next, Engaget is saying the device, which will be carrying either a full-on, or special-version of iOS (the operating system inside iPhones and iPads), will be capable of running apps from Apple’s App Store. Depending on how Apple plays it, these could either be “normal” iPhone/iPad apps or specialized ones. In the former case, we wonder if Apple then wouldn’t launch a new “Remote” app that would let you control the Apple TV apps from an iPhone, iPod Touch, or iPad–since the Apple TV would be set on top of your TV, it’s unlikely to get motion sensors.

The App Store feature is particularly interesting for one reason: Games. HD games on your TV would catapult Apple into the console gaming market, with thousands of ready-made games on the App Store. The hardware and software would be already familiar to developers, and they may be keen to code Apple TV-specific versions. We’ve long known Apple has hopes to enter the games market.

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Lastly the name: Reflecting Apple’s obsession with iDevices, Apple TV is rumored to be renamed to iTV. It’s actually what it was going to be called, back before its launch, and the name would definitely carry the iDevice kudos into a new product line. There may be some kerfuffle with one of the U.K.’s national terrestrial TV channels, which has been called ITV for decades, but such a naming conflict is nothing new to Apple.

it’s all beginning to make sense, and feel like the new iTV is really on its way. Let’s summarize what we know, or can conclude from the rumors:

Renamed iTV, to capture some iPhone halo power

Running iOS, which is probably more suited to managing media content and will run more smoothly on limited hardware

Limited internal storage capacity, making the most of cloud-based streaming or your own network storage devices

HD video out, possibly just 720p at first

May run apps

Will have Apple’s A4 chip inside, just like the current iPhone and iPad

May incorporate AMD’s new Fusion APU chips

May cost as little as $99 (which makes good sense, given there’s no need for a touchscreen, much internal flash RAM, hard drive or lithium battery–each of which would bump the price up).

What might the new iTV look like, though? We’re thinking it won’t be like the new iPhone, as there’s simply no need for that. It may borrow design cues from the iPad or new Mac Mini–an aluminum unibody, but more slender than the Mini as there’s no need for an optical drive, or much internal storage, or even a battery like the iPad. It needs to be just deep enough to fit in a power supply, chips, cooling, and external connector ports like HDMI, mini display port, USB and audio in and out.

Remember, though, this is all just smoke and mirrors until a real iTV appears on the scene (perhaps at the recently confirmed September 9th Apple event?). Till then, these glimpses are pretty tantalizing though.

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